In a NNN Lease or Triple Net lease a tenant is required to pay the taxes, insurance, and CAM (Common Area Maintenance). This is your share of the cost to maintain the building's upkeep, including common areas such as lobbies, hallways, garages, and elevators. You may also be asked to contribute a proportionate share for the building-wide air and heating costs. If you rent office space, there may be an additional management fee. This fee will pay for the superintendent of the building or the monthly fee the landlord pays a management company to run the building. These expenses are all included in the ongoing operating costs for the landlord.
Variable Operating Costs
Operating costs, such as taxes and insurance premiums, can occasionally be divided equally. Roof maintenance, systems repair, and so on benefit all renters, and sharing the expense among them according to the space they rent is the logical way to cover them. But the same isn't true for variable costs, such as electricity, gas, and water. Many of these costs are considered OPEX or operating expenses. The easiest solution to fairly allocate these expenses is through individually metered utilities. However, many buildings are not equipped to handle this and the expense of the conversion would heavily weigh on the current and future tenants, so many landlords and/or property managers will add in an additional OPEX. This fee is usually nominal compared to the NNN expenses, and sometimes they are added directly into the CAM section of the NNN. To ensure you fully understand the expectations of your lease, you should enlist the help of a Commercial Realtor who specializes in NNN lease negotiations.
Parking and other building perks
Other ways you can negotiate your lease can include the amount of reserved parking spaces, marquee or signage, directory, use of shared meeting rooms or other shared spaces, and even annual rent increases that can encroach on your bottom line or fluctuate due to market behavior over the years. To increase your chances of favorable NNN leases, we strongly recommend seeking out professional help by hiring a Realtor who specializes in your market.
Benefits of Working with Sage Street Realty
Our agents are all Licensed Texas Realtors led by Renae Anderson a Texas Real Estate Broker. We have an on staff attorney who can review docs to ensure our clients are protected. Our team specializes in both sale and lease contracts representing all buyers, sellers, tenants and landlords. We provide off site property management services for commercial landlords and small to medium multifamily owners. At this time we do not represent residential property owners but do have some great referral partners. Call us today for a free lease audit or to discuss what your business needs are.
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